Deutsche Bank AG is introducing an electronic platform for investors to trade options on single stocks, equity indexes and exchange-traded funds across U.S. derivatives exchanges.
The system will give clients access to automated trading across all 12 American options venues, including exchanges operated by CBOE Holdings Inc., NYSE Euronext, Nasdaq OMX Group Inc. and Bats Global Markets Inc., according to a statement from Germany’s biggest bank. The system will be part of Deutsche Bank’s Autobahn platform that includes tools for transactions in stocks, bonds, commodities and foreign exchange.
“Investors are increasingly looking to incorporate equity options into their trading strategies,” Jose Marques, the New York-based global head of electronic equity trading at Deutsche Bank, said in a statement sent to Bloomberg News.
Deutsche Bank’s expansion into electronic options trading shows the bank is seeking to tap into growing demand for options at a time when U.S. equity volume declines for a fourth straight year. Options volume in the U.S. has surged fivefold in the last decade, attracting new venues such as International Securities Exchange’s Gemini this year.
Investors tend to use automated execution less frequently with options, compared with shares. About 36 percent of institutional clients use electronic trading for equity derivatives, compared with 70 percent for stock transactions, according to data compiled by Tabb Group LLC. About 97 percent of the market making in options has been automated, a report from the research firm showed.
A daily average of 16.4 million equity options changed hands in the U.S. this year, a 2.9 percent increase from 2012, as demand increased for securities that can be used to protect against losses and speculate on the direction of stocks, according to data compiled by the Chicago-based Options Clearing Corp.
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